ETF's inefficient for portfolio modeling

L

LEAPup

Discussion: ETF's and portfolio modeling. Why not "round out" a portfolio with ETF's? The problem. Inefficiency. What say you, and why?
 
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No replies? Strange.
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Portfolio modeling discussion? Most of these guys are scalping for ticks. You might try bogleheads or morningstar for such a discussion.
 
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Ok, how about ETF's are simply inefficient all the way around.
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How is something like SPY inefficient? The management fee is next to nothing.

I think if you pick your ETFs properly they are an excellent tool however most don't understand ETFs or even know what they hold.

What is your issue with ETFs?
 
Quote from LEAPup:

Discussion: ETF's and portfolio modeling. Why not "round out" a portfolio with ETF's? The problem. Inefficiency. What say you, and why?
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The entire market is inefficient. Since ETFs are a proper subset of the entire market, QED.

I used to think markets were close to efficient, that the only place to find edge was on the high frequency. Markets are a complete disaster and have nothing even remotely resembling efficiency. I will tell you this, corporations themselves are probably the reason the markets are inneficient, since they buy back their stock regardless. So it is stocks that drive ETF (entire markets, even commodities?) inefficiency, not the other way around.
 
Ok, I decided to put any emotions I had about ETF's aside, and construct an almost all ETF portfolio for my Wife's IRA. Let's see where this goes.

Fills:
SPY 124.74
DIA 119.75
QQQ 56.52
DVY 52.81
GLD 169.46
SLV 31.91
REZ 41.49
XLP 31.92
(Bought her some AAPL filled at 386.25 Sorry, I couldn't help that one lol.)

Not finished yet, but will post the remaining positions when I finish rounding out the portfolio.
 
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